Release Date: February 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you discuss the expected increase in operating expenses for the second quarter and when you might reach a stable run rate for OpEx? A: Carol Hibbard, CFO, explained that they expect a $5 million to $10 million increase in OpEx for the second quarter, driven by long-term business investments and acquisitions. The increase is primarily in SG&A, and they anticipate a moderation in OpEx between R&D and SG&A in the future.
Q: What caused the operations services loss this quarter, and how should we think about gross profit for that business going forward? A: Carol Hibbard noted that the loss was due to supporting several large systems going live, which required additional resources. This is expected to continue in the near term but not at the same level, as they focus on reliability and customer support.
Q: How is the transition to in-sourcing progressing, and what impact does it have on margins? A: Carol Hibbard stated that the transition to in-sourcing is on track, with all work now in-house. They expect to see the first systems where Symbotic performed the EPC work completed in the next quarter, which should help manage schedules and improve system gross margins.
Q: Are there any changes in customer discussions or budget considerations for 2025 compared to last year? A: Richard Cohen, CEO, mentioned that there has been increased interest from various categories, including manufacturers and international inquiries, due to concerns about labor situations. They are encouraged by the new customer inquiries and orders, particularly from Walmart.
Q: How are you managing potential impacts from tariffs and labor price inflation? A: Carol Hibbard explained that the impact from China is immaterial, and they have contracts that typically allow for cost pass-throughs. They are working with suppliers to buffer against labor price inflation and are monitoring opportunities to offset costs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.